Resignation

Last updated 1 July 2013

1. Introduction

Resignation is not specifically dealt with under the Public Service Act 1999 (PS Act) or its subordinate legislation. As a result, the common law approach applies to the resignation from Commonwealth employment by all Australian Public Service (APS) employees.

The impact of this common law approach can vary, depending on the nature of the employee's employment—i.e. whether a person is engaged: as an ongoing APS employee; or as a non-ongoing employee for a specified term or task; or for irregular or intermittent duties.

Some of the information included in this advice is quite complex and it is suggested that agencies may need to seek their own legal advice in certain circumstances, in particular where issues of capacity arise or in some circumstances where an employee seeks to withdraw a resignation.

1.1 Common law position

At common law, an employee—other than a person engaged for a specified term or task—has a unilateral right of resignation on the giving of a valid notice to their employer.

The requirements for a valid notice might be set out in an enterprise agreement or a contract of employment. If not, the notice that must be given by an employee to bring the employment contract to an end must be ‘reasonable’ and must actually be received by the person to whom it is directed. However, at common law, there is no general requirement that a notice of resignation be given in writing, although this might be something that an agency might also set out in an enterprise agreement or contract of employment.

For employees other than those engaged for a specified term or task, a valid notice of resignation does not need to be accepted by the employer for it to take effect. Therefore a purported refusal to accept it will not alter the legal position that, unless the notice is withdrawn, the employment contract will come to an end when the notice period expires. However, if a notice of resignation is invalid (for example if it does not comply with the requirements of an enterprise agreement or a contract of employment), it will only terminate the employment contract if it is accepted and treated as valid by the employer.

1.2 Period of notice

Section 118 of the Fair Work Act 2009 (FW Act) provides that a modern award or enterprise agreement may include terms specifying the period of notice an employee must give in order to terminate his or her employment.

In order to avoid uncertainty as to what constitutes ‘reasonable’ notice, agencies may wish to consider specifying the required period of notice in their enterprise agreements or other instruments setting terms and conditions of employment for employees. They might also wish to include a term providing that notice be given in writing to a particular person, e.g. the agency head or a delegate.

1.3 Application to APS employment

As noted above, the common law approach to resignation provides that an employee, other than an employee engaged for a specified term or task, has a unilateral right to resign. This means that different arrangements apply to the resignation of persons engaged as APS employees for a specified term or task as opposed to those engaged as ongoing employees or as non-ongoing employees for irregular or intermittent duties. Further details are included in the relevant sections in relation to the resignation of ongoing and irregular/intermittent non-ongoing employees (Part 2) and specified term/task employees (Part 3).

In general terms, agencies should encourage managers to adopt processes whereby individuals who give notice of resignation (or indicate that they are considering resigning) are offered counselling and/or other assistance to ensure that they have made a considered decision and whether other options (such as paid or unpaid leave or internal re-assignment within the agency) are available and/or appropriate.

Cases may arise where employees who are in a highly emotional state, or who are suffering from a mental illness or psychological condition, give notice of resignation or indicate they are considering resigning. In these circumstances, agencies should consider what forms of assistance should be made available to the employee and it may be possible to allow the employee to reconsider this action and to allow for the resignation to be withdrawn—see Part 4.

Information on possible measures an agency can consider where an employee does not give the required period of notice is included at Part 5.

1.4 Engagement in circumstances where an employee's employment should not have ended

The Australian Public Service Commissioner's Directions 2013 allow an agency head to engage a person as an APS employee in circumstances where the person was a former employee of the agency and, following an investigation of the circumstances leading to the ending of the person's employment, the agency head decides that the person's previous employment should not have ended. See Part 6 for further details.

An ongoing APS employee, and a non-ongoing APS employee engaged for duties that are irregular or intermittent, may resign from their APS employment by giving notice to their agency head in accordance with any requirements set out in an enterprise agreement or other employment instrument. The resignation takes effect in accordance with its terms and does not require acceptance by the employee's agency before it can take effect.

Agencies may wish to consider specifying the required period of notice in their enterprise agreements or other instruments setting terms and conditions of employment for employees. They might also wish to include a term providing that notice be given in writing to a particular person, e.g. the agency head or a delegate.

Such a term might provide as follows:

Notice of resignation

In order to resign from their employment, employees engaged on an ongoing, or on an irregular or intermittent basis, are required to provide 2 weeks' written notice of their resignation to the Agency Head.

Alternatively, the enterprise agreement or other instrument could specify different periods of notice for different types of employees.

For example, employees at more senior levels or with specialist skills might be required to give more notice than those at more junior levels, consistent with the greater difficulty that an employer may face in replacing senior or specialist employees.

In addition, agencies may want to consider including separate arrangements for irregular/intermittent employees.

A provision dealing with notice of resignation in an enterprise agreement or other instrument could also require the employee to pay to the employer a specified amount in lieu of giving the required period of notice. It could also allow the agency head, at his or her discretion, to agree to a shorter period of notice, or to waive the requirement to give notice or make a payment in lieu of notice, in certain circumstances for example, where there are compassionate grounds, or where the employee is already absent on long term leave.

Note however that there are limitations on including provisions in enterprise agreements or other instruments authorising unilateral deductions from salary where a required period of notice is not given by the employee—for further information see Part 5.

A similar approach could be adopted for ongoing Senior Executive Service (SES) employees in their relevant employment instrument. For example, the employee's individual s.24(1) determination or common law agreement could require the employee to provide a specified minimum period of notice before a resignation may take effect, or else pay to the employer a reasonable amount that is specified in the instrument in lieu of giving the required notice.

In the absence of any specified period of notice in an enterprise agreement or other instrument, the length of notice that is appropriate to be given by an ongoing employee would depend upon what is considered ‘reasonable’ in the particular circumstances of each case. Relevant case law suggests that what is ‘reasonable’ will depend on the circumstances at the time notice is given, and not at the time the contract is made.

Relevant considerations might include the length of time that the employee has been employed; agency custom and practice; and factors which are relevant to the difficulty the agency head may face in filling the role such as the classification and importance of the role, rate of remuneration, the degree of specialisation and the complexity of the duties that will fall vacant.

An ongoing APS employee who is on temporary assignment to another APS agency (the gaining agency) by way of an agreement made under section 26 of the PS Act is, for all intents and purposes, an employee of the gaining agency for the duration of the temporary assignment—i.e. the employee is paid by the gaining agency, covered by the terms and conditions set out in the gaining agency’s enterprise agreement (or other instrument), subject to direction by the gaining agency head etc.

Accordingly, where an ongoing employee seeks to resign and the resignation is to take effect during a period of temporary assignment to the gaining agency (including on the last day of the temporary assignment), the resignation should be submitted to the agency head of the gaining agency, who should then advise the employee’s original agency that the employee has resigned.

In these circumstances, the gaining agency would generally be responsible for paying any final monies to the employee (and should seek to transfer leave balances and recompense from the original agency if they have not already done so).

Part 11 of the Financial Management and Accountability Regulations provides for the payment of monies between agencies when staff move and leave credits are transferred, and these provisions apply, regardless of whether it is an ongoing or temporary move.

There is a note included in these Regulations to the effect that where an inter-agency move is for a short period and the person will be returning to the original employer, the employers may agree that it is not efficient for the new employer to send an invoice and for the old employer to pay an amount under this regulation (as long as the employee will not be deprived of access to relevant leave).

3. Resignation arrangements – non-ongoing employees engaged for a specified term or the duration of a specified task

A person engaged as a non-ongoing APS employee for a specified term or for the duration of a specified task does not have a unilateral right to resign prior to the expiration of the period of engagement, or prior to the completion of the task for which he or she is engaged, unless this is expressly provided for under the terms of the engagement or agreed to by the employer.

Early termination of the period of the engagement by the employee in these circumstances may constitute a breach of contract. However, the period of employment may cease at any time with the agreement of both the employer and the employee.

For non-ongoing employees engaged for a specified term or task, agencies could consider including specific provisions in their enterprise agreement which provide a unilateral right to resign for these employees on the giving of a specified period or reasonable period of notice. Such a provision could expand on what is considered reasonable and require payment in lieu where reasonable notice is not given.

Alternatively, agencies could consider including provisions dealing with the resignation of specified term or task employees in the individual contracts of employment or notices of engagement, rather than dealing with this matter in an enterprise agreement. The advantage of this approach is that it would enable an agency to tailor the required notice period to the particular engagement. This would give the agency greater flexibility in cases where the employee has specialised or hard to replace skills that are crucial to a particular project, and where as a result an agency may decide to limit any right to resign to a narrower range of circumstances and require a longer period of notice or more significant compensation from the employee.

Provisions dealing with the resignation of non-ongoing employees engaged for a specified term or task may require the employee to pay to the employer a specified amount in lieu of giving the required period of notice. It could also allow the agency head, at his or her discretion, to agree to a shorter period of notice, or to waive the requirement to give notice or make a payment in lieu of notice, in certain circumstances for example, where there are compassionate grounds, or where the employee is already absent on long term leave.

Note however that there are limitations on including provisions in enterprise agreements or other instruments authorising unilateral deductions from salary where a required period of notice is not given by the employee—for further information see Part 5.

4. Withdrawal of notice of resignation

In accordance with the common law, an APS employee has no unilateral right to withdraw a valid notice of resignation.

A notice of resignation may only be withdrawn with the agreement of the agency head. There is no requirement that an agency head agree to a valid notice being withdrawn—the agency head is free to decide not to agree if he or she so chooses. It is important to note agreement can only be given to a valid notice being withdrawn before it takes effect, i.e. during the notice period.

However, there are circumstances where it would generally be appropriate for an agency to consider agreeing to the withdrawal of a resignation.

For example, situations may arise where an employee is in a highly emotional state and they submit their resignation in the ‘heat of the moment’.

Where an employee gives notice of resignation in these circumstances, and then quickly withdraws it, it would usually be appropriate for an agency head to ‘allow’ the notice of resignation to be withdrawn or to treat it as invalid and not accept it, and to proceed on the basis that the employment relationship has not come to an end.

Where an agency does not allow the resignation to be withdrawn, or where an employee does not seek to withdraw it before the resignation takes effect, the employee may still be able to argue, upon recovery from the emotional state, that the resignation should be able to be retracted upon recovery from the emotional condition.

However, legal precedents1 indicate that the exception is narrowly confined in these circumstances so that it will apply only if the notice is retracted as soon as the employee recovers from the emotional condition.

There is support for the view that the longer the time that elapses between the giving of notice and the subsequent withdrawal, the more unlikely that the resignation would be considered to be invalid2.

The same reasoning would apply where a notice of resignation is provided by an employee following unreasonable pressure from the employer, that is, where elements of duress may be present.

4.1 Incapacity

In addition, another exception relates to situations where an employee lacks the capacity to resign from their employment, e.g., where an employee is suffering from a severe mental illness or psychological condition so that they could not be considered to have the required mental capacity to resign from their employment.

In these cases, the agency head should treat the notice as invalid and proceed on the basis that the employment contract has not been terminated. In some rare cases where the mental incapacity of an employee is so severe, the notice of resignation may be taken to be of no effect at all. In those circumstances, it would not be open to an agency head to ‘accept’ the notice nor for the employee to retract it, as for all intents and purposes it would be taken to have never been given at all.

It is particularly important that the cases involving highly emotional employees and employees suffering from mental incapacity are dealt with sensitively, and agencies may consider a range of options including the offer of counselling, undertaking additional enquiries into the employee's situation, referral to the agency's employee assistance provider etc, before assuming the resignation is effective/valid. It is strongly suggested that agencies consider seeking legal advice should a situation arise involving the issue of an invalid notice or incapacity.

5. Limits on capacity to deduct an amount from final monies – use of Chief Executive Instructions

As noted earlier, an agency can include a provision in its enterprise agreement, engagement advice, contract of employment or other instrument setting terms and conditions of employment, which requires an ongoing or non-ongoing APS employee to pay to the employer a specified amount in lieu of giving the required period of notice or resignation. However this does not mean that an agency can automatically deduct the amount from an employee's salary or final monies without the specific agreement of the employee.

An enterprise agreement cannot include a term which allows an employer to unilaterally decide to deduct or withhold an amount from an employee's final monies where the employee does not provide the required period of notice of resignation.

An agreement or other instrument can provide for the employee to agree to make the relevant payment, or for a deduction to be made with the specific agreement of the employee in individual cases.

In order to enable specific deductions to be made without employee agreement, agencies can consider including provisions in its Chief Executive Instructions (CEIs) which would authorise the agency, at its discretion, to withhold an amount from an employee's final monies in circumstances where:

an agency has included notice of resignation provisions in an enterprise agreement or other employment instrument; and

the required notice of resignation is not given.

The need to use CEIs in these circumstances arises because of certain provisions of the Fair Work Act 2009 (FW Act) which set out rules about the payment of amounts to employees in relation to the performance of work—deductions from such payments (including on termination) can only be made if permitted by that Act.

Division 2 of Part 2-9 of the FW Act regulates the payment of amounts to employees in relation to the performance of work, including the deductions that are permitted to be made by an employer.

Section 323 of the FW Act provides that, except for deductions permitted under s.324, an employer must pay an employee in full for the performance of work (including during paid periods of leave).

Section 324 provides that an employer may deduct an amount from an amount payable to an employee in return for work where the deduction is authorised:

in writing by the employee and is principally for the employee's benefit;

by the employee in accordance with an enterprise agreement;

by or under a modern award or a Fair Work Australia order; or

by or under a law of the Commonwealth, a State or a Territory, or an order of a court.

Where an agency has included notice of resignation provisions in an enterprise agreement or other instrument, it can also include provisions in its Chief Executive Instructions (CEIs) which would authorise the agency, at its discretion, to withhold an amount from an employee's final monies where the required notice of resignation is not given.

As CEIs are made under the Financial Management and Accountability Act 1997, a deduction that is authorised by or under a CEI is ‘authorised by or under a law of the Commonwealth' for the purpose of s.324 of the FW Act and the deduction in these circumstances may be made without the express agreement of the employee.

It is therefore possible to provide for a deduction from an amount payable to the employee for the performance of work (including during paid leave periods) in a CEI, without requiring the agreement of the employee. In order for the CEI to authorise the deduction, the specified amount to be withheld should be reasonable in the circumstances e.g., it should be commensurate to the required notice period not given or worked.

6. Engagement of employees where previous employment should not have ended

Under the Australian Public Service Commissioner's Directions 2013 (the Directions), an agency head is able to engage a person as an APS employee in circumstances where the person was a former employee of the agency and, following an investigation of the circumstances leading to the ending of the person's employment, the agency head decides that the person's previous employment should not have ended (see clause 2.23 of the Directions).

An engagement in these circumstances is not subject to the usual advertising or merit selection requirements that normally need to be observed before a person can be engaged as an APS employee. This provision could, at the agency head's discretion, be used in a case where a resignation has taken effect, but it is later discovered that the relevant notice of resignation should not have been treated as valid by an agency because, for example, the employee did not have the required capacity to intend to resign or more generally where there are concerns about the processes leading up to the resignation.

It is a matter for each agency to assess whether a former employee who has resigned should be re-engaged in these circumstances.

Note that an engagement in these circumstances should be on the same basis (ongoing or non-ongoing) as the person's former employment and can only be at the person's former classification or a lower classification.

An engagement in these circumstances will need to be notified in the Public Service Gazette.

Connect with APSC

The Australian Public Service Commission (APSC) is a central agency within the Prime Minister and Cabinet portfolio. The Commission supports two statutory office holders: the Australian Public Service Commissioner - who is also agency head - and the Merit Protection Commissioner. Their functions are set out in sections 41(1) and 50(1), respectively, of the Public Service Act 1999.